This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Autotrader's IPO Has a Few Dents

Investors should realize Autotrader is facing heavy competition from and as well as search engines like Yahoo! (YHOO - Get Report) and Google (GOOG - Get Report).

Autotrader seems to recognize that having a site that sells car isn't unique or sticky. So, they are heavily invested in their software solutions for car dealers, an arena where competition isn't quite as stiff.

Auto makers and dealers realize that car shopping is increasingly moving online and the advertising dollars are following the shoppers. Borrell Associates predicts that online media buys for the auto industry will rise 39% in 2012. Auto ad dollars will be shifting away from direct mail, magazines and radio. CarMax (KMX - Get Report) has learned this and has a strong web presence. Franchised auto dealers have also increased their online presence. is taking market share and now web behemoth Google is getting into the lead generation business. If Google thinks you are looking for a car, like a Toyota, then it will give you a car and dealer to look at. For now it is only being tested in certain markets in California. CarWoo! is rumored to be hooking up with Yahoo! Autos. Maybe because they both like exclamation marks? These deals demonstrate the battle for online auto shoppers is heating up.

Autotrader wants to raise $300 million and this is its second attempt to go public. The timetable for the listing is still unclear and the company filed once before in 2000, only to withdraw. The company plans to list on Nasdaq under the symbol "ATG."

The fact that the company is already profitable and has a stable revenue base is a big plus, but investors need to consider the tight competition and hefty debt load before ponying up for Autotrader.

-- Written by Debra Borchardt in New York.

>To contact the writer of this article, click here: Debra Borchardt.
Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.
2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
GOOG $693.01 0.00%
KMX $52.95 0.00%
YHOO $36.60 0.00%
AAPL $93.74 0.00%
FB $117.58 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs